So you’ve started your business or planning to launch a new venture soon? You’ve done your homeworks, did a market study, built your business plan and you have a solid product!
Have your planned your business strategy?
Every business, big and small, should take a few steps back and do an exercise called « Strategic planning ». It essentially consists of thinking critically about 3 very important aspects of your business :
- Where you are
- Where you want to go
- How will you get there
This post will give you access to 4 simple tools that are helping thousands of entrepreneurs in achieving their business goals. Let’s start with the one you most likely know already but never actually used : the SWOT analysis.
Every business, big and small, should take a few steps back and do an exercise called « Strategic planning »
Framework 1 : SWOT analysis
This simple yet powerful tool provides you with valuable information on internal and external factors, affecting your business. Your strengths and weaknesses as an entrepreneur and a person as well are considered internal factors ; opportunities and threats influencing your business and industry are the external factors.
Here’s a visual representation that you can use with helpful questions to joggle your thinking!
Why you should do a SWOT analysis?
Simple! To reflect on future challenges. Knowing yourself and the market will help you align your unique strengths on market opportunities while alleviating any threats that might hinder your quest for world domination. If you’re having any challenges in your business, they should pop out of your SWOT analysis.
Framework 2 : Porter’s 5 forces
Michael Porter, an American professor at Harvard Business School, built a framework in 1979 to help analyze an industry’s competitive landscape. The framework is still in use today with good reasons. An updated version can include a sixth force: politics and legislation.
Why you should use Porter’s 5 forces?
It can help you see where you are situated in terms of rivalry, competitive intensity and overall industry attractiveness. It tells you how easy it is (or difficult) for your competitors to enter your market, what substitutes is available for your clients to move to and the threats of your clients or providers in driving your price.
For example, launching a new car requires enormous capital and expertise and constitutes a gigantic barrier to entry. In the consulting industry, anyone can call themselves a consultant and create their own firm with little to no resources.
Framework 3 : Key performance indicator or KPI
What you don’t measure, you don’t control! This simple tip is often neglected by many businesses,
simply for the fact that it can be a pain to apply. This is a mistake in many ways :
- How can you know your marketing initiatives are paying off if you don’t calculate the ROI (return on investment)?
- How can you track productivity if you don’t keep track of it?
- How can you know where to invest your limited resources if you don’t know which projects will yield the best results?
Why you should always set KPIs
Any initiatives should be measured in terms of performance, cost, ROI, etc. Simply to give you business intelligence on where you are going and how you are performing. The best companies know they are the best since they can actually measure it and compare themselves with their industry’s best-in-class.
When planning a project, always set clear objectives using SMART as a model and measure it. What is SMART might you ask? It’s an acronym to help you set killer objectives!
Get to work!
Now that you know the basics of planning a killer business strategy, you should get to work and reflect with your team, your users, your spouse even. Use these frameworks to surpass your competitors! Note that these tools are the first part of planning your strategy. More tools will be available soon so subscribe to our newsletter!